Mitrade Insights is dedicated to providing investors with rich, timely and most valuable financial information to help investors grasp the market situation and find timely trading opportunities.

2021

Best News & Analysis Provider

FxDailyInfo

2022

Best Forex Educational Resources Global

International Business Magazine

Insights

News

Why Super Micro Computer Stock Was Sliding This Week

Source The Motley Fool

Shares of Super Micro Computer (NASDAQ: SMCI) were heading lower this week as a combination of a sell rating from Goldman Sachs and a broader sell-off in artificial intelligence (AI) stock, which weighed on the maker of AI servers.

According to data from S&P Global Market Intelligence, the stock was down 16.5% for the week as of 3:12 p.m. ET on Thursday.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

An engineer in a data center using a laptop.

Image source: Getty Images.

Is Super Micro Computer in trouble?

The market tends to heed ratings changes from Goldman Sachs more so than other investment banks and research firms, so it wasn't surprising that the stock pulled back on the downgrade.

Goldman Sachs downgraded Supermicro to sell with a price target of $32, arguing that the risk/reward in the stock is now unfavorable. It also noted that competition in AI servers is heating up in response to Supermicro's sales surging last year. Finally, it said that its gross margins, which are already low, could decline further due to new competition.

Supermicro stock fell as much as 6% on Monday, though it recovered most of those losses by the end of that session, as the broad market surged on hopes for easing trade war tensions.

However, two days later, Supermicro stock was falling, in line with the broad market partly because of President Donald Trump's announcement of tariffs on foreign vehicle imports. AI stocks fell sharply as investors view that sector as being one of the most at risk of a recession.

What's next for Supermicro

Super Micro Computer does seem to have put the earlier concerns about the delay in filing its annual report behind it, but the business still needs to perform in order for the stock to do well.

In addition to revenue growth, it's key for the company to maintain or expand its already-narrow gross margin. In its second quarter, it reported a gross margin of just 11.8%, and operating income fell slightly.

Competition could already be weighing on the stock, though its growth is still strong. Supermicro looks well priced right now, but it will have to defend its market share and margins in order for the stock to be a winner.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $295,009!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,000!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $523,463!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Continue »

*Stock Advisor returns as of March 24, 2025

Jeremy Bowman has positions in Super Micro Computer. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.

Recommended Articles

【Daily Brief】10-year Treasury yield briefly tops 5%, S&P 500 slips to 7,602 and the dollar firms at 99.3 as the Fed's decision eve begins The 10-year Treasury yield touched 5.014% on Monday — its first print above 5% since October 2023 — while the S&P 500 closed 0.48% lower at 7,619.98 and the dollar index firmed to 99.3. Here is the full market wrap ahead of Wednesday's FOMC decision, the dot plot and the August retail sales report, plus today's CLARITY Act Senate vote.

Author Irene Q.

Sep 15, Tue

The 10-year Treasury yield touched 5.014% on Monday — its first print above 5% since October 2023 — while the S&P 500 closed 0.48% lower at 7,619.98 and the dollar index firmed to 99.3. Here is the full market wrap ahead of Wednesday's FOMC decision, the dot plot and the August retail sales report, plus today's CLARITY Act Senate vote.

October hike odds climb toward 60% as Goldman and BofA both flip — what Warsh's "dose of accommodation" really changed Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.

Author Irene Q.

Sep 23, Wed

Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.

Four jobs reports in five days: what JOLTS, ADP, claims and the September payrolls mean for the October Fed decision The US labour market faces its densest data week of the month. JOLTS job openings land Tuesday (7.2 million expected), ADP on Wednesday (70,000 expected), initial claims on Thursday and the September non-farm payrolls on Friday (100,000 expected, down from 162,000). Markets price a 64%-70% chance of another quarter-point Fed hike on October 28. The dollar index sits at 100.77 and the S&P 500 at 7,729.8.

Author Mitrade

Sep 28, Mon

The US labour market faces its densest data week of the month. JOLTS job openings land Tuesday (7.2 million expected), ADP on Wednesday (70,000 expected), initial claims on Thursday and the September non-farm payrolls on Friday (100,000 expected, down from 162,000). Markets price a 64%-70% chance of another quarter-point Fed hike on October 28. The dollar index sits at 100.77 and the S&P 500 at 7,729.8.

Nvidia's $150 billion buyback landed — and the AI sector fell anyway. That's the signal worth trading Nvidia closed up 1.68% at $228.86 on 28 September after announcing a $150 billion share repurchase authorisation, the largest single corporate buyback on record, while the rest of the AI complex sold off: AMD -3.6%, Micron -2.6%, Meta -4.8% and the Philadelphia Semiconductor Index -1.61%. The divergence is not noise. Capital is rotating toward cash-flow certainty, not abandoning the AI theme. With Micron reporting after the close on 30 September, here is what the split means.

Author Irene Q.

18 hours ago

Nvidia closed up 1.68% at $228.86 on 28 September after announcing a $150 billion share repurchase authorisation, the largest single corporate buyback on record, while the rest of the AI complex sold off: AMD -3.6%, Micron -2.6%, Meta -4.8% and the Philadelphia Semiconductor Index -1.61%. The divergence is not noise. Capital is rotating toward cash-flow certainty, not abandoning the AI theme. With Micron reporting after the close on 30 September, here is what the split means.

The 30-year Treasury just hit a 22-year high — and the bond market is not pricing the Fed, it is pricing the deficit The 30-year Treasury yield closed at 5.56% on 28 September, the highest since June 2004, while the 10-year reached 5.24% and the 20-year 5.60%. The curve has steepened roughly 30bp in eight sessions even as October hike odds sit at 70.3%. That gap is the story: the long end is repricing fiscal and inflation risk, not policy. With PCE on Wednesday and payrolls on Friday, here is what the long end is really saying.

Author Irene Q.

18 hours ago

The 30-year Treasury yield closed at 5.56% on 28 September, the highest since June 2004, while the 10-year reached 5.24% and the 20-year 5.60%. The curve has steepened roughly 30bp in eight sessions even as October hike odds sit at 70.3%. That gap is the story: the long end is repricing fiscal and inflation risk, not policy. With PCE on Wednesday and payrolls on Friday, here is what the long end is really saying.

Popular Symbols